What to Do When Social Security Says You Received a Disability Overpayment

If you receive an overpayment notice from Social Security, you can appeal, request a waiver, offer a compromise, or demand a lengthy repayment plan.

By , J.D. University of Missouri School of Law
Updated 5/13/2024

Overpayments occur when the Social Security Administration (SSA) pays disability recipients more benefits than they were due, often because their income, resources, marital status, or living situation has changed. When Social Security discovers it has made an overpayment, it sends the disability recipient a Notice of Overpayment, stating the amount of improperly paid benefits and instructing the recipient to return the excess benefits within 30 days.

If you've received a Notice of Overpayment from Social Security, you do have options. You can file an appeal if you disagree with the existence of the overpayment or the amount of the overpayment.

If the overpayment wasn't your fault and repaying it would cause you financial hardship, Social Security might agree to reduce the amount of the overpayment or even waive it entirely. If Social Security determines that the overpayment is justified but you don't have the funds to repay it immediately, the agency will usually agree to set up a reasonable payment plan.

How to Appeal an Overpayment

Just as Social Security sometimes mistakenly pays more benefits than were due you, the agency also sometimes issues overpayment notices erroneously. If you don't believe that you were actually overpaid, or if you think that Social Security has calculated the amount of your overpayment incorrectly, you should file SSA Form 561, Request for Reconsideration.

The deadline for filing the reconsideration request is 60 days after receiving the Notice of Overpayment. But if you file within 10 days of receiving the notice, the SSA won't attempt to recover your overpayment until after your reconsideration has been decided.

You may have no idea whether the alleged overpayment is justified or not. In this case, filing a reconsideration request forces the SSA to look at your case again and explain to you why it believes you were overpaid.

At the reconsideration stage of your appeal, you're entitled to present evidence to support your case at an informal hearing with a Social Security employee. If Social Security denies the reconsideration is denied—meaning the agency says the overpayment is valid and must be repaid—you have 60 days to request a hearing in front of an Administrative Law Judge.

If you receive an unfavorable decision from the ALJ, you have another 60 days to pursue your final administrative appeal in front of the SSA's Appeals Council.

If Social Security says you owe a significant amount of money, it's a good idea to contact an experienced disability attorney as soon as you receive your overpayment notice to handle your appeal.

What If I Can't Repay the Overpayment?

Here are your options when you get an overpayment notice from the SSA.

Requesting a Waiver

If you can't afford to repay the amount you owe to Social Security, you should file Form SSA-632, Request for Waiver of Overpayment Recovery or Change in Repayment. A waiver will usually be granted if:

  • the overpayment was not your fault, and
  • you can't afford to repay the overpayment because the money is needed for ordinary and necessary living expenses.

A lack of fault, not the inability to repay benefits, is usually the major stumbling block in obtaining a waiver. If the SSA believes that you knew you hadn't reported a change in income or living arrangements, and your lack of reporting created the overpayment, the agency may deny your waiver.

Social Security could determine that an overpayment was not your fault in situations like the following:

  • You reasonably believed that you had reported all required changes in your living situation.
  • You were not informed of the requirement to report changes.
  • You are illiterate or did not understand the reporting requirement.

If your waiver request is denied initially, the SSA will arrange a personal conference at your local Social Security field office where you can argue your case to an SSA employee. Social Security should allow you to review your claim file at least five days before the conference is held.

If the waiver request is still not granted after the personal conference, you can request reconsideration and then an administrative hearing. For more information, read about appealing a denied overpayment waiver request.

Social Security routinely grants waivers requested in cases where an SSI overpayment is $1,000 or less, as long as the overpayment was not caused by the beneficiary's fraudulent activity.

Setting Up a Payment Schedule

On request, the SSA will usually arrange a payment plan for you if you can't afford to repay the overpayment all at once. If you're still receiving disability benefits, Social Security may agree to reduce your monthly check by as little as 10%, or even less, until your debt is satisfied.

If you can't afford to pay the overpayment at the rate Social Security requests in its notice, you can file Form SSA-634, Form SSA-634, Request for Change in Overpayment Recovery Rate to ask to pay over a longer period of time. You may want to contact your local SSA field office to discuss this option.

Negotiating a Compromise

Although Social Security doesn't always publicize this fact, the agency will sometimes agree to compromise on the amount of the overpayment, if you can pay the reduced amount agreed upon in full and fraud wasn't involved in the overpayment.

In general, Social Security will usually accept a lump sum settlement of 80% or more of the amount due. Overpayments of more than $5,000 could be knocked down even further. It never hurts to call Social Security and make a reasonable offer for less than you owe, though you will need to put the request in writing after you speak to the agency (you can use Form SSA-795, Statement of Claimant for this purpose). Before accepting less than 80% of the overpayment, the agency will probably also request that you fill out Form SSA-634 with your financial information.

How to Prevent Overpayments From Happening

Recipients of SSDI and SSI are required to inform Social Security of any changes in income and employment. SSI recipients must also report changes in living situation or marital status. A great number of overpayments are caused by recipients who fail to report these changes. Be sure to keep the SSA up-to-date on these changes to avoid incurring inconvenient and potentially costly overpayments. Read more about the changes you need to report to Social Security.

How to Find an Attorney Who Will Take an Overpayment Case

Many disability attorneys don't take overpayment cases because they have to petition Social Security to be able to charge you a fee. You can try to find an attorney by calling disability lawyers in your community and asking if they take overpayment cases. Alternatively, you may be able to find a legal aid lawyer to help you with your overpayment case. For more information, read about finding a lawyer for help with a Social Security overpayment.

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